Saudi authorities tighten rules for contracting firms to ensure quality

Saudi authorities tighten rules for contracting firms to ensure quality
The system is applicable to all projects in building and construction, operations and maintenance, communications and IT and real estate development.
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Updated 05 September 2021

Saudi authorities tighten rules for contracting firms to ensure quality

Saudi authorities tighten rules for contracting firms to ensure quality
  • A contracting firm’s financial, technical, and management abilities will be taken into consideration

JEDDAH: In a bid to improve quality control, the Kingdom has announced that tender applications for projects in different sectors will only be accepted by qualified contractors who meet the criteria recently set by the authorities, according to details published in the Kingdom’s official gazette Umm Al-Qura on Friday.

Under the new system announced in late August, contractors will be evaluated and classified based on several factors such as the qualification and specialties of a contracting company’s employees, experience, remuneration, percentage of the Saudi workforce, and gender ratio.

In addition to that, a contracting firm’s financial, technical, and management abilities will be taken into consideration and a thorough background check and history and quality of their completed projects will also be carefully studied.

The new rules stipulate that if two or more contractors are bidding for a project as a joint venture, at least one of them should meet the criterion while the other partner’s credentials should also match the minimum Saudi standards.

The regulations also apply to those contractors who have been licensed according to the foreign investment system. They should also be classified under the new system. However, a committee of ministers can make special exemptions for such contractors as per the requirement.

Violators of the new system will be subjected to penalties such as a change in classification to a lower level etc.

The system is applicable to all projects in building and construction, operations and maintenance, communications and information technology, real estate development, engineering consultation, conference and forums, and catering and nutrition.